Wealth – 7 Timeless Principles

The Richest Man in Babylon by George S. Clason was one of the first books I read on the subject of wealth. I was fascinated by the storyteller’s simple principles to acquire
wealth and riches and I thought, “this is too easy”. Yet, all those years ago with the knowledge held within the pages of this simple book, I did not take heed. It would be many years before I understood what the story had foretold and I, like many others, would learn the hard way about building a relationship with money, and ultimately building my cash reserves.

With our economy in such a state of influx and the uncertainty of our country’s future, it is prudent to teach our younger generations the importance of establishing a strong relationship with money. So many books have been written on the subject of money management and yet 8 out of 10 households have credit card debt in excess of $15,000.

Why haven’t we learned the simple rules of building wealth?

Where did we miss the mark?

Lack of discipline and respect for money has caused much of this country’s default status. A small portion of blame can be placed upon the educational system. That’s right…the curriculum is not inclusive of finance and money management. Our children are learning how to count, but not how to spend or save for that matter. Parents should take a more proactive role in teaching their children about the realities that lay ahead in the real world concerning money.

The lessons are simple; the action is difficult for those who have never systematically implemented a plan. However, with commitment and a goal bigger than your immediate wants, you will achieve your financial goals with ease. The following is a rudimentary outline of the seven prosperity principles as this author has interpreted them from the famous book:

Principle 1 – Pay Yourself First – Take a percentage from your net earnings to keep for yourself. The best use of this money is to invest in your future by placing it in a secure instrument that can grow tax-free, be distributed tax-free, and can be passed on tax-free.

Principle 2 – Create a Spending Plan – Unlike budgeting, a spending plan allows you to plan how you will spend your money. This includes all your bills and all the “extras” you want. Whatever you have left after you create your spending plan should be invested in Principle 1.

Principle 3 – Make Your Money Multiply – This is where, again, Principle 1 can be greatly beneficial. Think of the extra money you have left in Principle 2 as employees. You employ these employees to work for you in Principle 1. Believe me, they will work harder than you ever will!

Principle 4 – Avoid “Get Rich Quick” Schemes – This is self-explanatory! Everything is not a great opportunity, but rather, a great down-fall. Be mindful that every “new idea” is an old one, regurgitated. Pass on it.

Principle 5 – Own Your Own Home – This one, I have learned needed a little tweaking. Yes, own your home, but then rent it out. There is a saying that states, “Rent where you live, and own what you rent.” Mortgages are liabilities until you own the deed. In oder to make the best of that situation, generating profit income on a rental to handle the mortgage until you own it is a way better plan.

Principle 6 – Insure Your Future – I can not stress enough how important it is to have a Whole Life Policy working for your financial. You can build cash reserves to use while you are still living, and leave a financial legacy for your family. The earlier you acquire your policy, the better!

Principle 7 – Increase Your Ability to Earn – Hone your skills! You can do a lot of things well, so why not earn money with it. That hobby enjoy so much can be a money earner to fill the gap in your finances. You’re doing something you love, and making enough extra cash to invest or spend on yourself so that you don’t disrupt your goal in Principal 1.

The old cliché “it’s not how much money you have, it’s what you do with it that counts” is true and there aren’t enough of us doing what we should with our money. The downside to this is we are in a race against time, never knowing when we will run out. Each of the seven principles outlined here gives you the foundation for establishing a financially secure future. You can choose not to be a statistic of the working poor, or worse, never reaching retirement age. Start right where you are; it’s never too late.